South Africa’s central bank to bring new cryptocurrency rules

South Africa’s central bank to bring new cryptocurrency rules
  • South Africa's central bank announced new crypto rules that would control the amount of money that is leaving the country.
  • The country has strict limits regarding how much money can leave, but the existence of crypto allowed coin holders to send more.
  • Meanwhile, the country's First National Bank also decided to stop providing services to exchanges from March 2020.

South Africa’s central bank, SARB (South African Reserve Bank), recently announced that it is working on a new set of rules for the cryptocurrency. The rules will prevent people from using digital coins to evade currency controls and are supposed to arrive in only a few months.

This was confirmed by the Bank’s deputy governor, Kuben Naidoo, who expects that the rules will be in place before the end of Q1 2020. According to what is known, the rules will restrict how much of the local currency can leave the country. Right now, that limit sits at 11 million rands, which is around $750,570.

1 million rands ($68.225) can be sent without any declaration, while the rest requires a special application to the country’s revenue service, SARS. Due to these restrictions, South African crypto users started using digital currency to send funds outside of the country. However, the country’s central bank now plans to include the money sent via digital currencies under the restrictions, as well.

The report about this was posted by SA Crypto, which is South Africa’s blockchain community. SA Crypto also stated that they were unable to confirm whether their own sources’ reports were true. However, if the reports are correct, this is likely to have large consequences on the country’s crypto exchanges.

Country’s banks might stop providing services to exchanges

Other concerning reports from the country also indicate that South African local banks have recently stopped serving crypto exchanges. The First National Bank admitted so openly around two weeks ago, noting that it stopped providing services to VALR, Luno, and ICE3X, due to increased risk.

Marius Reitz, Luno’s general manager, confirmed this by saying that the exchange’s account at FNB will be closed as of March 2020. Fortunately, the exchange also collaborates with other banks, so its clients will still have the ability to use the platform. However, ICE3X called the move conservative, and it requested that the regulators publish some clearer guidelines.

Another noteworthy report claims that the SARB’s decision to start bringing crypto rules shed light on digital currencies in the country. A single P2P Bitcoin trading platform known as Paxful said that 800,000 new wallets were opened in the last year, as reported by TheBlockCrypto. This indicates that the African crypto market is growing at a rapid pace.

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